Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, September 30, 1993                   TAG: 9309300265
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

GOVERNMENT WORK TREATED AS THEIR VACATION

Some also vandalized office restrooms, according to an investigative report that paints a portrait of a government savings and loan cleanup project that on occasions resembled a late-night card party.

"At times, 50 to 150 temporaries were observed playing poker during office hours," said the report by the Resolution Trust Corp.'s inspector general.

Workers "would brag about sleeping on the job, taking two-hour lunches, reading the newspaper," the report said. "Temporary employees were idle a lot of the time; one shift did nothing for eight hours."

The lax oversight cost taxpayers nearly $20 million in unnecessary costs: The contractor charged the government 67 cents per photocopy - four to six times prevailing market rates, according to the report.

It criticizes the RTC, which is overseeing the savings and loan cleanup, for failing to properly monitor the temporaries hired by the Price Waterhouse accounting firm under an RTC contract to audit Home Federal Savings Association, a failed San Diego thrift.

Some temporary workers were relatives of Price Waterhouse employees, the accounting firm has acknowledged.

"RTC ignored contracting policies, procedures, internal controls, and overall costs," the inspector general concluded in the 37-page report to acting RTC head Roger Altman dated June 25.

"In the future, if RTC's actions are not tempered with prudent planning, respect for existing policies and procedures, and serious attention to cost containment and accountability, RTC risks repeating the mistakes it made."

RTC spokesman Steve Katsanos said the agency already has tightened its management in response to the report. "There were also some things that we found that we passed on to them for their investigation," he said.

In a prepared statement, Price Waterhouse defended its work as "done well, under extraordinary, difficult circumstances, at a fair price."

"Price Waterhouse has been unfairly criticized and has somehow become a victim of a much larger dispute concerning alleged deficiencies in the RTC's contracting practices," the firm said.

The Home Federal case has become a symbol for critics who say the RTC's contracting procedures can deepen the problems of the S&L bailout, which is expected to cost taxpayers up to $300 billion.

In addition to millions of dollars in cost overruns, the report also cites disciplinary problems.

"Temporaries were involved in vandalizing the break room and rest room facilities," it said. "Briefcase searches were implemented to deter the theft of equipment."

The report said part of the problem was that the RTC had just three employees to oversee the work of a Price Waterhouse work force that reached 1,300 at its peak during the summer of 1992.

The investigators also questioned the salaries, saying workers were paid about 17 cents per page copied or an average of $35 an hour.

"The . . . figure seems a high price to pay for temporary labor," the report said.

After agreeing to cut 20 percent from its original bill, Price Waterhouse charged the government $22.9 million for the project. The initial request included more than $24 million in fees alone.